Lukewarm Windows 8 Reception and Delayed Public Sector Projects Dampen 4Q 2012 Philippines PC Market, Says IDC

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11 Mar 2013

Manila, Mar 11, 2013 -- The Philippines PC market dipped sharply by 23% QoQ, shipping a total of 393,000 units in 4Q 2012.

According to IDC’s Asia/Pacific Quarterly PC Tracker, overall consumer shipments were down as channels were still stocked with Windows 7 models from previous quarters. This affected the shipments-in of new Windows 8 stocks which were already facing lackluster end user responses.

Also compounding these problems was the usual seasonal practice among channels to avoid loading their warehouses in preparation for the new year. Large/Very Large Enterprises and the public sector were the primary contributors to the commercial market as these two segments fully utilized their IT budgets in Q4.

The consumer market declined 32% QoQ in 4Q 2012 with 208,000 units recorded. Windows 8 failed to boost PC shipments as anticipated prior to its launch. Consumers and channels were conservative and played a wait-and-see approach before making any commitments.

MNCs were not the only ones affected by weak consumer spending and overstocked inventory in 4Q 2012. These problems also extended into the Whitebox and Clone PC markets which dropped 19% QoQ.

According to Juan-Jin Ng, Market Analyst for Client Devices Research at IDC Asia/Pacific, "The slump in demand for Whiteboxes was the primary reason for the drop in the consumer desktop market. In addition, Intel and AMD chipset channels were holding alarmingly high stocks of ageing inventory and chose to clear these units through dealer and end user programs in order to start 2013 afresh."

The commercial market in 4Q 2012 declined by 8% QoQ to 185,000 units due to yet another weak quarter from the SME segment. Whiteboxes in this segment faced similar problems to consumer desktops; Clone PC channels were focused on flushing out old stocks instead of bringing in new shipments.

Despite the fulfillment of several large projects including the Bureau of Inland Revenue and Supreme Court deployments, the public sector was impacted by yet another delay of a large Department of Education shipment.

Juan-Jin adds, "While Business Process Outsourcing (BPO) companies continue to support the growth of Large/Very Large Enterprise sector in 4Q 2012, spending trends are indicating a potential slowdown in future spending, as a result of local market saturation and the trickle-down effects of the European and US economic crises. Growth should still maintain for this business segment but it will not be as bullish as previously forecasted."

Figure 1

Total: 392,953 units

Source: IDC Asia/Pacific Quarterly PC Tracker 4Q 2012

Figure 2

Total: 392,953 units

Source: IDC Asia/Pacific Quarterly PC Tracker 4Q 2012

IDC has revised its forecast higher for the 1Q 2013 Philippines PC market to reflect a 22% QoQ growth. Despite the continued delay of the Department of Education rollout, the Q1 market is expected to improve as channels stock up on new Windows 8 PCs while touch screen panel shortages are overcome.

Daniel Pang, ASEAN Research Manager for Client Devices at IDC Asia/Pacific commented, "Touch screen Windows 8 notebooks appear to be gaining popularity in the Philippines as consumers respond positively to these novelty devices. Vendors are taking advantage of this growing trend by introducing more low-end touch screen models into the mass market. This will likely give the PC market a much needed boost for 2013."

For further information on the findings contained in this report, please contact Harsha Sundararaman at +65-6829-7716 or hsundararaman@idc.com.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For more than 49 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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